DUMPING A non-Tariff barrier to Trade or Protection for Australian Industry

OVERVIEW Dumping, What is it? Understanding the terms Definitions Dumping Duty Elements Interim Dumping Duty Reassessment Procedures

Dumping, what is it? A commercial decision Common business practice Selling goods below Current Domestic Value in the country of Export Is it illegal?

Why do we have the legislation? Protection of Australian industry!

Dumping is a simple exercise Basic principles? – Decide on criteria – Calculate values – Determine result The devil is in the calculation

The Terms Normal ValueS269TAC Export PriceS269TAB Material InjuryS269TAE Ascertained (Non-Injurious) Export Price S269TACA Causal EffectS269TAE Dumping Commodities Register (DCR)

The Terms Dumping Anti-Dumping Action Third Country Dumping Interim Dumping Duty Dumping Cash Securities Countervailing Duty Third Country Countervailing Duty Price Undertakings

References Customs Act –Part XVB, Division 1, Section 269T Customs Tariff (Anti-Dumping) Act –Section 8, 9 - Dumping Duties –Section 10, 11 - Countervailing Duties –Section 12 - Interim Duty not to exceed cash security

Dumping Commodities Register DXP - adjustment for credit terms DCR………..1% per month When to deduct. Currency Conversion - at the “Customs ruling rate applicable at the date of the export transaction (valuation date)” However - “rate of exchange”…….“that best establishes the sale” S269TAF Dumping Reason Codes COMPILE Field Codes

Dumping Duty Section 269TG, Customs Act Section 8(2), Customs Tariff (Anti-Dumping) Act Amount by which Normal Value exceeds the Export Price Section 8(6) - Normal Value is determined by Customs investigation (S269TAC) - Export Price is determined during the same investigation (S269TAB)

Interim Dumping Duty Section 8(3), Customs Tariff (Anti-Dumping) Act “pending final assessment of dumping duty payable” Amount by which Normal Value exceeds Ascertained Export Price S8(4) - Normal Value is determined by Customs investigation - Ascertained Export Price is determined during the same investigation as the non-injurious export price PLUSPLUS Amount by which Ascertained Export Price exceeds Dumping Export Price Ascertained Export Price less the actual price at FOB in the export sale

Interim Dumping Duty Two components Part (a) always payable Part (b) payable, re circumstances of sale Importers may apply for reassessment Part XVB - Division 4, Customs Act, S269V onwards –ACDN 99/019 Requirements for reassessment –not more than 6 months after the end of the period –importer contends dumping duty less than collected –ACDN 99/019

Application Process for reassessment Lodged within the next period In writing Describe the goods on each consignment Provide an amount - the difference Customs has 155 days to recommend Information not supplied on time disregarded

Dumping Cash Security Interim measure, Section 269TD “sufficient grounds” (prima facie case) - “preliminary affirmative action” require & take securities - 269TD(4) Conversion of securities to DD or IDD Interim duty collected not to exceed security S12 CT(AD)Act

RECENT CASE - QUENOS, Polyethylene LLPDE -ACDN 2003/27 RKOR THAI HDPE-ACDN 2003/28 RKOR MLAY SING SWED THAI Revision of Securities for ACDN 2003/36

Anti-Dumping Investigations Starting an investigation Application process Termination of an investigation Timelines

Starting an investigation Industry determines reason for current ills due to dumped imports Builds its case based on known factors loss of market share loss of profits Is able to quantify the amount of material injury Is able to show a “causal link” between dumping activity & material injury

Application process Lodged in accordance with Section 269TB(1), where (a)a consignment of goods (i)has been imported in Australia (ii)likely to be imported into Australia (iii)may be imported into Australia being like goods to which (i) or (ii) applies - (b)there is, or may be, an Australian industry producing like goods; and (c)a person believes there are, or may be reasonable grounds for dumping or countervailing notice that person may apply to the Minister

Application process Section 269TB(2) - Third Country Dumping application where (a)a consignment of goods (i)has been imported in Australia (ii)likely to be imported into Australia (iii)may be imported into Australia being like goods to which (i) or (ii) applies - (b)there is, in a third country an industry producing like goods; and (c)the Government of that third country believes there are, or may be reasonable grounds for dumping or countervailing notice that Government may apply to the Minister

Application process The CEO must notify the government of the exporting country only if not deciding to reject the application The CEO must notify the government(s) if countervailable subsidies suspected of the exporting country - nominated exporters of any other country - allegedly providing subsidies invite consultation as to existence & level of subsidies Application to be in approved form and lodged in approved manner Definition of “sufficient part of domestic industry”Sec. 269TB(6)

Termination of an investigation CEO must terminate investigation if no dumping margin or margin considered negligible (2%) Sec. 269TDA(1) no countervailing subsidy or subsidy considered negligible (2%) Sec. 269TDA(1), (16). volume is negligible (3% of total volume exported to Aust.) REFER ACDN 2003/30

Timelines Prima Facie screening20 days Customs investigation Preliminary affirmative (securities available) 60 days Statement of essential fact days ( may be extended to 155 days) Recommendation to Minister - max 155 days Minister’s decision to impose duties or not Trade Measures Review Officer(Part XVB - Division 8, 9) reference if initial application rejected - 60 days reference if Customs investigation terminated interested party requests to review Minister’s decision - 30 days recommendation to Minister re review - 60 days

Summary Dumping action Dumping Cash Securities Interim Dumping Duty Dumping Duty Countervailing Duty Third Country Dumping & Countervailing Dumping Commodities Register reason codes, exchange rates, interest Application process Review Process RECENT CASE - QUENOS, Polyethylene

Practical questions answering guide Similarity in structure of all dumping questions Requirement to establish if dumping occurs What will you need to calculate to answer the question? USE FULL QUANTITIES! Identify the structure - what is the question? Will Interim Dumping calculation be required? Structure your answer Start by calculating DXP, from invoice details Then calculate AEP, from given details Ensure they are in same currency and level Show your calculation workings Make a decision - is Dumping Duty or Interim Dumping Duty payable ? Answer the Question asked!

Theory questions answering guide These are not usual but might include Application process inc. timelines Definitions Dumping, Interim DD, DD, Countervailing D, Subsidies TMRO What is the examiner looking for? How well do you know the Dumping legislation? Do you understand the process?

Questions Where are we now? How much don’t you understand?